Jan Thu 2023 03:50:42
Kathmandu. This is the question that common investors are now asking about the stock market, which is on the rise with the formation of the new government.
What these questions indicate is that confidence has not increased among investors. Some investors are trading for a short period of time. However, many people say that when the market rises above 2500.
Claiming to have done a factual analysis, he says, "Especially now, there is no basis for the market to grow." No economic indicators are positive. In such a situation, it is foolish to expect that the capital market will improve.
Then, the answer to the question why the NEPSE index has increased now, is that the big investors had really reached a state of panic. An opportunity opened up between the demands made by the bank and the pain of not being able to pay the interest. That is, the formation of a new government. In which the arrival of Prime Minister Prachanda and Finance Minister Vishnu Paudel. Paudel is one of those people who want to please everyone and only wants to be their own best. He gave a positive message while meeting capital market players. That was enough to increase the market. On the other hand, the players did not miss the chance.
This is just a game in the plan that by increasing the index a little, at least the installments and interest of the first half of the year can be taken out of the market. The market is not growing and investing now is just a trap.
Market analysts say that big investors are thinking that they will increase the market for a couple more days and withdraw money after reaching around 2200 points. According to him, the market will grow as much as possible within the month of Push. After that, it can go below 1800 points. Therefore, it may be foolish to invest now.
In order to have a significant increase in the capital market, the interest rate of the bank must decrease. It is not going to decrease now. Nepal Rastra Bank is under pressure to control prices in the market if the interest rate does not decrease. And, globally, the interest rate increase is being used as the only tool to control the rising prices.
Apart from that, if the banks invest openly in Nepal by lowering the interest rate, all the money will be spent on imports. Thus, when there is an increase in imports, the reserves of foreign exchange will immediately decrease and we will come under the unbearable pressure of the external sector.
People who want to increase the stock market by arguing that money has started accumulating in the bank, liquidity shortage will be removed, but now people are not in a position to go to the bank to take loans due to the high interest rate. Until it is certain that the capital market will grow to be able to afford the interest rate at which money is available in the bank, only a fool would look for a loan and invest in shares.
Until all this becomes easy, until the economic recession that is coming internationally passes a stage and the main indicators of Nepal's economy take a positive direction, it is not seen that the stock market will grow sustainably.